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Commission adopts rules for implementing the Foreign Subsidies Regulation
The European Commission has adopted on July 14 the rules for implementing the Foreign Subsidies Regulation (‘FSR’). The Implementing Regulation details procedural aspects of the implementation of the FSR. It also contains notification forms for concentrations involving foreign financial contributions and for foreign financial contributions in public procurement procedures.
The Implementing Regulation
The Implementing Regulation adopted today takes into account the feedback received during the one-month public consultation period that took place between 6 February 2023 and 6 March 2023. In particular, as mandated by the FSR, it addresses respondents’ requests to limit the administrative burden related to notifications.
The Foreign Subsidies Regulation sets out an obligation for companies to notify:
- concentrations where the acquired company, one of the merging parties, or the joint venture is established in the Union and generates an EU turnover of at least €500 million and where the parties to the transaction were granted combined aggregate foreign financial contributions of at least €50 million over the past 3 years;
- foreign financial contributions in public procurements procedures, where the estimated contract value is at least €250 million and the bid involves combined aggregate foreign financial contribution of at least €4 million per third country over the past 3 years.
The Implementing Regulation, and in particular the notification forms, detail the reporting obligations of notifying parties, specifying the information that needs to be included in the notification forms for concentrations and public procurement procedures. In particular:
- For concentrations, companies have to report:
- for foreign financial contributions which are considered by the FSR as the most likely to distort the internal market (such as those granted to ailing undertakings, those directly facilitating a concentration or unlimited guarantees, also known as “Article 5 financial contributions”), detailed information on all financial contributions of an individual amount of at least €1 million, granted to the parties to the transaction over the past 3 year;
- for all other foreign financial contributions, an overview of financial contributions granted to the notifying party/ies over the past 3 years, of an individual amount of a least €1 million and in relation only to those countries that have granted to the parties to the transaction at least €45 million over the 3 years before the concentration, subject to a number of exceptions.
- For foreign financial contributions in public procurement procedures, companies have to report:
- for foreign financial contributions, detailed information on all financial contributions falling under Article 5 of at least €1 million individually granted to the notifying party/ies in the three years prior to the notification;
- for all other foreign financial contributions, an overview of financial contributions granted to the notifying party/-ies of an individual amount of a least €1 million and in relation only to those countries that have granted to each of the notifying party/ies at least €4 million per country over the 3 years prior to the notification
Moreover, the Implementing Regulation provides detailed rules on:
- the procedure for notifications to the Commission of concentrations and of participation in public procurement involving foreign financial contributions. This includes the notification forms for each procedure, the person entitled to submit a notification and the effective date of notification;
- the Commission’s investigation process, including procedures to be followed by companies for submitting commitments to address possible concerns of the Commission;
- the procedural rights of the parties regarding the protection of confidential information, access to files and submission of observations;
- the calculation and suspension of time limits for the provision of information and submission of commitments;
- the transmission and signature of documents by notifying parties to the Commission through digital means, where relevant.
(Source: European Commission)
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